Have you considered switching from paper checks to electronic
transfers? It could mean lower costs and improved tax and payroll
operations for businesses with employees. Yet among businesses with
fewer than 20 workers, only 17 percent have opted for direct
deposits, according to a recent International Communications
Research survey. In contrast, 99 percent of employees in Japan and
about 90 percent of Europe's work force have their pay
deposited directly into their bank accounts.

The survey, conducted for Intuit, also found that 40 percent of
entrepreneurs spend at least 50 hours a year doing payroll taxes.
(Perhaps not co-incidentally, that same percentage reported hav-ing
been penalized an average of $845 by the IRS for late or inaccurate
payroll tax filings.) That's more than a full week each year to
manage a twice-monthly payroll, fill out quarterly tax forms,
prepare pay-period tax deposits and print W-2s. So if your time is
worth $100 an hour, then you're spending $5,000 a year on
payroll-not to mention the 8.5 to 24 hours per year that employees
take out of their work days to visit the bank and deposit their
paychecks, according to National Automated Clearing House
Association estimates.

Aside from the time factors, though, direct deposit and payroll
services just make good sense when you consider the nominal
costs-beginning at less than $20 a month-and the range of services
offered. For example, Intuit's QuickBooks Deluxe Payroll
Service (www.intuit.com/quickbooks/products/payroll)
manages federal and state payroll tax filings; automates federal
and state tax deposits; calculates, prints and mails W-2s; tracks
changes in law; and reconciles. The service starts at $32 per
month, and an optional direct deposit service is available for
$1.50 per paycheck per pay period.